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How Are Unpaid Internships Legal? Interview with Subject Expert

Erich J. Prince is a co-founder and the editor at Merion West. Erich has written for a variety of publications including The Philadelphia Inquirer, the Hartford Courant, The News & Observer, and the Orlando Sentinel. His writing has been honored with two awards from the Columbia University School of Journalism. He studied political science at Yale, completing his thesis on the history of polarization in the United States Congress. Contact Erich at erich@merionwest.com.

05/05/2018

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Some argue that minimum wage laws should be differentiated by both industry and region. After all, it doesn’t cost as much to live in Macon, Georgia as it does to live in New York City.

On April 19th, University of Georgia Law School professor and former chair of the National Multiple Sclerosis Society, Weyman T. Johnson, joined Erich Prince to discuss current debates in the area of wage law, including the disconnect between federal and state approaches to minimum wage, legal issues surrounding unpaid internships, and restaurant workers being paid subminimum wage.

For our first question, I was taking a look at your remarks before The House Energy and Commerce Subcommittee on Health, and you give this powerful testimony on Multiple Sclerosis in your capacity as chair of the National Multiple Sclerosis Society. I’m wondering how your legal background informs your non-profit work and furthermore if you believe that non-profit organizations ought to seek out people who have that particular legal background when making their selections for their board and leaders?

It’s interesting. I think the MS society is not unlike other health advocacy organizations in that the persons who gravitate towards them generally are people with some kind of connection to the condition that they’re concerned about. There is a lot of recruiting that goes on to find the best people to run the organizations. But, in large part, it’s the self-selected people who bring their energy. I, like a lot of people connected to the national MS society, have a personal connection to the disease. In our family, there are four of us, two deceased now, and there’s my sister too. So that’s what really drove me during the 1980s to get involved with [this advocacy] at a local level.

A lot of business people, who are involved in the leadership of the organization, commented that they’re surprised there are so many lawyers among our board leadership. And their comment is that a lot of lawyers have to bill hours, so when do you have time to do this sort of thing?

But I think the lawyers are drawn to it because lawyers understand how organizations work. They understand about checks and balances, critical thinking, examining different perspectives, and having a dialectic that can come into making a defensible and useful decision. So I think that’s what draws people to pure advocacy, such as going and talking to members of Congress. Lawyers understand how legislation works better than the average citizen does, so lawyers have a very realistic view about what can be accomplished in the legislative arena.

You make a good point, I think about self-selection of people personally affected by tragedies or diseases and their motivation to act. There’s Jason Alexander, George from Seinfeld, for example, getting involved with scleroderma advocacy after his sister was diagnosed with the disease, and I think there are likely innumerable instances of things along those lines.

But, moving on a bit to your area of legal work, which is labor and employment law, perhaps you can start by discussing the federal minimum wage, which since July 24, 2009 has held steady at $7.25.

Obviously, we’ve seen in the meantime a lot of states and municipalities enacting a higher minimum wage, and this is, of course, a rallying cry for many Democrats in Congress. I’m wondering if you have some reasons in mind for why the minimum wage is being treated so differently at the federal level than at the state and municipal level. Could you foresee a move in the federal minimum wage? Could that even be an area of some bipartisan agreement?

It’s kind of hard to predict bipartisanship here in late April of a congressional election year because I think all the attention is on the election in November. So not knowing what sort of Congress is going to come out of that, I really couldn’t predict bipartisan effort. It’s been so long since we’ve seen anything like that.

I do think that a fundamental problem in our democracy is the disparity in incomes and the weakening of the middle class. I do think the minimum wage should certainly be higher than $7.25. But, at the time, when it turned out to be a number with a “7” in front of it that was a big change because it had been depressed for such a long period of time.

I do think that’s an underlying social problem, and I think it accounts for a lot of the divisions in the country right now. I can understand some of the more creative arguments that it should be differentiated by industry or that it should be differentiated perhaps even by region. It doesn’t cost as much to live in Macon, Georgia as it does to live in New York City. If we have a more united Congress, and, by that, I don’t mean another party in charge—but perhaps something closer to a balance between the parties, there might be grounds for the kinds of discussion across the aisles we’re nostalgic for.

But then there’s the fundamental issue of disparity in income. I think the decline of trade unions has something to do with that too. If we were longing for some time when there was a more solid middle-class and middle-class jobs even for persons, who didn’t have advanced degrees, that was, in large part, because of effective union contracts. This happened in industries where there was labor peace and both sides seem to be relatively happy with one another. And I’m not a nostalgiac, but I do think a lot of this has to do with the present impotence of the National Labor Relations Act.

Should the Congress take action as you’re suggesting—to potentially raise that minimum wage differentiated by region—would you also like to see any changes to the fact that exemptions exist for certain categories of employees, who aren’t necessarily entitled to a minimum wage?

Well, the efforts that were made by the prior administration—which have been placed on hold not only by the courts but by the present administration—were going in the right direction, I think. It was probably politically untenable to move that far that quickly. Because if you look at any group f employees in a large organization, you can think about the standards that we have for the exemptions: the white-collar exemptions, executive, administrative, and professional.

There are a lot of people who are lumped into the executive exemption under the Fair Labor Standards Act, and it just doesn’t make sense based on the power that’s vested in them and their jobs, it doesn’t seem to accord with what the original statute suggested. So there does need to be some rethinking about how those exemptions are allocated and the efforts by the Department of Labor near the end of the Obama administration. Some are aimed at raising the salary level and calling out employers by saying, “If you’re not going to pay these people in the 40’s, then you certainly can’t treat them as fully-exempt and not entitled to overtime. There may be other ways to do that, but that was, I think, a step in the right direction to try to accord the exemptions closer to reality.

Are you comfortable with some of the exemptions to certain folks such as those who work on tips, are seasonal works, or are farm workers?

“Comfortable” might not be the right word. Well, a lot of that is the political reality. Part of the problem with the way tipped employees are treated is that they’re all treated the same way. So if you make a substantial amount of your compensation in tips, then an employer can pay you a sub-minimum wage. It works really well for somebody who is a waiter at a white tablecloth restaurant and makes handsome tips. So again, I think there needs to be some adjustment there in order for that to really to make sense.

I’m getting a sense that you would shy away from some of these one size fits all legislation.

Well, I don’t think one size does fit all. I do think that a lot of times legislation is well-intended, but, after a bit of experience with it, we see that its generalities don’t necessarily fit the real workplace. Now, that’s one of the reasons we have a Department of Labor that can make regulations.

I think both parties over the decades have done some good things to help workers. It’s just been a long time since anything really was accomplished. We do tend to go back and forth depending on which party holds the presidency. It’s just like a pendulum. And again if we were closer to having more bipartisan discussions, then there might be more stability in those things. [In a more bipartisan climate], reforms that were enacted under the Bush administration would be built upon by the Obama administration, and that sort of thing would happen instead of just constant reversals.

My next question concerns a topic that gets a fair amount of press, and that’s the issue of unpaid internships, especially in the private sector. I’m wondering if you can weigh-in on that balance between a young person getting some experience in an industry where he does not already have a lot of marketable skills, as weighed against the risk of possibly being taken advantage of by the company with which he’s interning.

I think a balance is appropriate here. I’m not sure that it really has happened. I mean the most recent thing that happened is that the Second Circuit weighed-in with a decision that was really fairly pro-employer. But going back to the one-size-fits-all issue, it was a New York large company, and [that was reflected] in the way [the case] was analyzed. I think the real problem is that—yes, there are circumstances where a young person who lacks a lot of work experience can gain experience by working in some fashion and maybe not necessarily being subject to all of the benefits of the Fair Labor Standards Act and can, [by doing the internship] gain an educational element from an employer.

But most of the internships that have been subject to litigation—once you read the facts—most of the time, the people were just gofers, and they weren’t really learning anything. They were just doing the lower-level work in a large organization. So, if you do balance the benefit to the alleged employee and benefit to the employer, and if there is some requirement of some kind educational element, then that seems to help both sides a lot more.

The Court used to say a lot about this in the original decisions that were made back in the early days of the Fair Labor Standards Act. A person is a trainee or intern, only if they’re almost in the way. If the employer has to stop and teach them something then yes, that might be a legitimate trainee, and perhaps the employer should not have to pay that person according to the requirements of the Fair Labor Standards Act. But, if it’s just a person who is, because they’re young doing the low-level work and really just substituting for low-level employees, who would be paid properly, then the balance is not struck. So, we just need to recognize that there needs to be something in it for both sides, both employer and the trainee or employee.

I’m wondering what sorts of websites and resources you can recommend to casual observers of law, who wanted to keep tabs on decisions coming out of Circuit Courts, the Supreme Court, and just developments in law generally. I know Cornell Law School, for example, keeps an accessible summary of cases. But, which platforms do you find to be the most objective, bias-free, or thorough?

Well, you’re right, there are a lot of them. I think many of the ones I run across do seem to have a more partisan point of view. I think that the SCOTU.S. blog, which talks about the Supreme Court, is pretty good and accessible. I mean there’s some jargon in it, but it’s not loaded with it. I think the biggest problem is that we don’t have enough good content providers there.

Again, I’m not saying this like a nostalgiac—but when we had good newspapers in all of our major cities, a lot of them had a competitor newspaper. Court matters were covered in a very commonsensical way, in a good civics lesson fashion. The average citizen could read about it and could make his own conclusions about what it meant. I was encouraged this week when I read about the growth of Reporters for America’s effort to get more journalists distributed into more small communities. Because that is a problem. And that’s one of the reasons I was really happy to hear about your efforts. Despite there being a plethora of platforms out there, I’m troubled by the ones that don’t take the journalism seriously.

I do think a citizen today can read reports from the main national newspapers: The Wall Street Journal, The New York Times, The Washington Post, even USA Today, which is certainly a more slender publication. These everyday newspapers tend to cover judicial developments in a commonsensical way and in a manner that doesn’t necessarily reflect their editorial pages. So I just think we need more of that; we need more good content out there—just plain old journalism simply trying to report what happened. I think we need more people doing what you’re trying to do: that is just doing good basic journalism.

I appreciate your saying that. Thank you for your time today, Professor Johnson—very nice to talk to you.

Erich J. Prince is a co-founder and the editor at Merion West. Erich has written for a variety of publications including The Philadelphia Inquirer, the Hartford Courant, The News & Observer, and the Orlando Sentinel. His writing has been honored with two awards from the Columbia University School of Journalism. He studied political science at Yale, completing his thesis on the history of polarization in the United States Congress. Contact Erich at erich@merionwest.com.